Brands
After online grocery delivery, Zomato pulls the plug on its nutraceutical business
MUMBAI: Foodtech platform Zomato has shut down its Nutraceutical business. The development comes hours after the company decided to pull the plug on its grocery delivery business from 17 September, citing tough competition and moderate success.
In 2020, Zomato had started its nutraceutical business with the launch of health and fitness products. The decision comes at a time when the government is turning stricter about private label norms for marketplace businesses in the country. The online food marketplace had tapped into the nutraceutical opportunity related to food products that offer medical or health benefits last year, expecting it to be a large value driver for Zomato.
Zomato had earlier announced its decision to stop its grocery delivery service effective 17 September, mainly on account of gaps in order fulfillment, leading to poor customer experience. It had launched the pilot grocery delivery service in July this year in select markets offering grocery delivery within 45 minutes to its customers. The company also said that it believes that its investment in Grofers will generate better outcomes for its shareholders than in-house grocery efforts.
In an email to its grocery partners, the online food delivery platform said, “At Zomato, we believe in delivering best in class services to our customers and largest growth opportunities to our merchant partners. We don’t believe that the current model is the best way to deliver these to our customers and merchant partners. Hence, we intend to stop our pilot grocery delivery service effective 17 September, 2021”.
The email mentioned that “store catalogues are very dynamic and inventory levels change frequently. This has led to gaps in order fulfillment, leading to poor customer experience”.
In the same time period, the express delivery model, with under 15 minute delivery promise and near perfect fulfilment rates has been getting a lot of traction with customers and expanding rapidly, the company further said in the email. “We have realised that it is extremely difficult to pull off such a delivery promise with high fulfilment rates consistently, in a marketplace model (like ours),” the mail said.
Zomato has invested $100 million (around Rs 745 crore) for acquiring a minority stake in grocery delivery platform Grofers.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI:Â Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
